A former Lake Oswego contractor who accepted hundreds of thousands of dollars for work never completed was sentenced Monday to three years in jail on charges of racketeering.

Jane O'Brien, a Damascus homeowner, urged Clackamas County Circuit Judge Jeffrey S. Jones to consider how Jimmy Ray Kelly, Jr., 50, harmed her family. O'Brien and husband Mel gave Kelly $50,000, financed by a home equity loan, only to find out Kelly would never begin the remodeling after he lost his license.

"At 55 years old, I have been unable to find employment to assist with the increased debt we owe," Jane O'Brien said. "My husband is now 60 years old, and sees no end to his working life."

Kelly, who worked under the name Northwest Home Source, was found guilty of racketeering earlier this month for bilking First Security Bank of Washington out of more than $80,000 by persuading several homeowners to sign loan documents that allowed him to defraud the institution.

Kelly also must pay $64,000 in restitution to a bank and three Oregon homeowners.

His attorney John E. Gutbezahl argued for no prison time, saying Kelly's actions indicated a last-ditch effort to save his failing business, rather than greed.

Senior Assistant Attorney General Andrew Campbell said although only transactions involving First Security Bank were included in the indictment, about 20 of Kelly's alleged victims have come forward. Like O'Brien, several of them sat in the courtroom Monday afternoon.

One scoffed as Kelly, in his prison jumpsuit and shackles, told judge Jeffrey S. Jones that he had run his business "as best as he could" and never entered any homes with the intention of defrauding customers.